The Importance of Competitor Analysis In Winning Your Customers

Competitor analysis allows you to spy on businesses that could be stealing your customers.

Never underestimate the importance of knowing who these businesses are and what they’re up to as you can find some interesting insights.

For example:

• What are their strengths and weaknesses?
• Have they recently launched something new?
• Are they entering a new market?
• Why do customers typically buy from them?
• How do they market themselves and what channels do they use?

By knowing the answers to these things, you can find gaps in the market that you can use to your own advantage. If you know customers usually choose them because of their speedy delivery for instance, is this something you can look to replicate?

It’s not about copying your competitors, but rather revealing any opportunities for you to improve your own offering and to have a competitive edge. For example, your competitor might have a speedy delivery service but is their customer support lacking? If so, this is an area you can really focus on, giving customers a solid reason to choose you over them.

If you’ve never done a competitor analysis before or even looked at who your competitors are, then this is the blog post for you.

Let’s get started with how this process can lead to business results.

What Is Competitor Analysis?

Competitor analysis is a process that involves understanding how your competitors are performing. This means knowing their strengths and weaknesses allowing you to take advantage of any short fallings.

These brands are important to you as they are offering the same or a very similar solution to the needs of your customers. As such, you need to differentiate yourself from them otherwise what’s encouraging your customers to choose you over them?

If there’s no difference in what you offer, you’ll just be another option, rather than being the go-to brand which people continue to buy from regardless of how overcrowded the market gets.

Why Is Competitor Analysis Important for Business Results?

Knowing what your competitors are up to isn’t about being nosy; it’s about finding insights that you can action in your own business to increase customers and revenue.

It’s focussed on achieving real business results by understanding what others in your market are doing so you can do it better.

As we said in the intro, by understanding the areas they perform well in and the areas they fall short, you can put steps in place to better that. This gives customers a strong reason to choose you, even when other brands are competing for their attention.

In any market, you’re going to be up against other brands. Unless you have a super niche product, the likelihood is, the market is going to be flooded with other companies offering the same thing.

Your question needs to be: How do I stand out?

Once you know this, you’re winning. Whether it’s through a captivating, unique marketing campaign that takes social media by storm, or a new innovative prodigy that no one else has released yet, you need to have something unique.

This is why competitor analysis is so important for your business as it ensures you not only attract customers but continue to attract them as more brands flood the market.

How Knowing Your Competitors Can Win Customers

Conducting a competitor analysis allows you to win more customers by understanding any areas where other businesses are falling short.

Customers are flooded with offers every day, so they need a clear reason to choose you.

Below we’re discussing how this process can help with customer acquisition, but also customer retention.

Provide better quality service

Your competitors might be doing better than you in several areas such as price or convenience. However, a common area where brands fall short is their level of service. This can be particularly the case when brands grow or expand too quickly, as their focus shifts to scaling operations and increasing output rather than maintaining the personal, attentive service.

By knowing this information, you can focus on your quality of service ensuring customers are having a positive experience every time they interact with your brand. This is one of the most affordable areas to compete in yet its importance is often overlooked.

For instance if you’re a smaller business, lowering your price to match your competitors simply might not be an option. However you can compete with them in other ways such as delivering a better quality service which is something customers remember time and time again.

Build customer loyalty

This leads on from the point above, but by investing in quality service, especially when you can’t compete with brands in other ways, you’ll build customer loyalty.

This is also a long term win as once customers come to know and trust your brand, they’re usually invested. This is despite being swayed by other tempting offers such as discounts and deals. Customer loyalty can be one of the best tools in your armoury against competing brands, as it means customers will stick by your brand regardless of newcomers on the market.

Building customer loyalty isn’t easy, but by investing in quality service and putting your customers first, you’re laying the foundations for lasting relationships that go beyond one-off transactions.

In turn, loyal customers are more likely to come back to your brand and even spend more over time. In competitive markets, where rivals may try to outspend or undercut you, having a group core of loyal customers gives you stability and a powerful competitive edge.

Spot gaps in the market

By conducting a competitor analysis, you can identify any gaps or missed opportunities that your rivals aren’t currently capitalising on. Perhaps this is a certain product or a product feature that your customers would love – yet it doesn’t exist.

By carrying out this process and spotting where these opportunities lie, you can take advantage of it and make sure your brand offers it first. This gives you a solid lead over your competitors as you’re satisfying the needs of your audience.

In turn, they’ll feel valued and listened to as you’re responding to what they want. This can be very powerful when it comes to winning your customers as everyone wants to feel heard and understood.

Tip: Buying something is not just about a transaction; it’s a process often fuelled by emotion. By understanding what your audience wants, and what your competitors are failing to offer, you’re positioning your brand to meet their needs on a deeper level.

Refine your messaging

By knowing what your competitors are saying to your customers and the types of messaging they’re using, you can refine yours to make it stand out.

Put yourself in your customers shoes first of all.

All day every day they’re bombarded with brands trying to get them to buy something. The chances are, lots of these brands are saying the same thing, whether that’s about saving them money, time, or bettering their life in some way.

Your job (by carrying out competitor analysis) is to find a different message – something that feels unique to your customers that they haven’t heard before.

This gives you a competitive edge as you’re differentiating your brand and cutting through the noise.

Stay ahead of trends

Your competitors can help you understand how the market is shifting or pivoting towards something new. Customers change all of the time and what they want and expect from a brand is always evolving.

This means brands that stay still often fail as they’re falling behind what their customers want. Whilst staying true to your brand and your values is important, knowing how and when to adapt to the changing world around you, is key for survival.

By keeping an eye on what your competitors are doing, you can identify any changes that might be happening in your industry. For example, have they recently discontinued a once popular product? This could be a sign that customers are no longer interested in it.

Likewise have they started marketing themselves on a new channel? This could be a clear indicator that this is where your audience is now spending their time.

Knowing what your competitors are doing to stay relevant can give you learnings into how to do the same.

How to Conduct a Competitor Analysis

Below we’re exploring how to conduct competitor analysis allowing you to carry out this process in your own business.

Whilst lots of companies are unsure how or where to start, this process is essential to winning more customers and standing out in a saturated industry. Don’t underestimate the importance of knowing the brands who are trying to steal your customers!

Identify your main competitors

Before you can start identifying where the gaps are, you need to know who your competitors are. You might know some businesses already whereas others might have slipped below your radar.

So the first step involves listing the businesses you know, then doing some research to find any others. There are various tools you can use, including Ahrefs, which gives you a list of websites competing for the same terms as you.From here, you can see any crossover of your services or your target audience, helping you identify which companies are truly competing with you.

It’s important you include both direct competitors (those selling the same thing to the same audience) and indirect competitors (those offering alternative solutions to the same problem) as you’re all competing for the same customers.

Gather information on their offering

Now you know who these businesses are, you need to analyse them in more detail.

Start by delving into their products and services to get a real feel for what they’re offering to customers. This includes looking at their:

• Pricing
• Quality
• Messaging
• Imagery / videos
• Any guarantees
• Call-to-action buttons
• Testimonials / case studies / reviews
• Deliveries / returns
• Marketing channels
• Customer support

To do this, explore their website, social media, reviews, and marketing materials to get a better insight for how they’re connecting with their customers. The more information you can get at this stage the better, as this will help you improve the way you market your own products and you might also be inspired to try something new.

For instance if they’re attached videos to products to explain how they work (this is effective across a range of industries as customers love to see products in action) you might decide to do the same. Perhaps this is something you hadn’t considered before but since the competing brand did this, they might have seen an increase in customers and sales.

You need to understand exactly what customers are choosing between when they compare you and your competitors.

Analyse their customer experience

Customer experience is vital as this is the difference between someone buying from a brand or shopping elsewhere. We’ve all been there; you go on a website and you’re met with loading speeds, links that don’t work, and blurred imagery.

All this does is deter you from exploring any further and you bounce back to Google. If you’re finding this experience on your competitors website, there’s something you can use to your advantage.

Also check reviews and find out how they interact with their customers. For example, are they known for their fast responses and above-and-beyond service? If so, this is an area you know you need to level up in, or if not, there’s an opportunity for you to take the lead.

Evaluate their marketing and positioning

Knowing how they market and promote their brand is key, so pay attention to their tone of voice, messaging, social media activity, content strategy, and advertising as this helps you understand what’s resonating with customers and what’s not.

For example, have they started publishing explainer videos on TikTok which have surged in likes and comments?

This could be a clear sign that your brand should be doing the same thing as this is drawing attention from the right people. Especially if TikTok is not a channel you’re currently utilising, you could be missing out on a big opportunity as your audience are clearly spending their time here.

Similarly have they changed their current tagline to focus more on the history of their company rather than the benefits to the consumer?

If this has fallen flat, it could be a sign that this type of messaging just doesn’t hit the market, and customers are more interested in learning the benefits to their own life.

Identify strengths, weaknesses, and opportunities

Now the real analysis comes together. Once you have your list of competitors, the way they market themselves, and their level of customer experience, you need to outline their strengths and weaknesses. From here you can pinpoint the opportunities more clearly by knowing where the gaps are.

Pull your findings together in one report allowing everyone to analyse it easily. A table works great for this, with your list of competitors down the side and columns assigned to their strengths, weaknesses, and opportunities.

It’s important that everyone in the business has access to this and understands who your competitors are as you’re all working towards the same goal.
This document can be added into your overarching brand strategy pack as it’s an important part of your efforts to win more customers and to retain them long-term.

The Importance of Competitor Analysis In Winning Your Customers

Carrying out a competitor analysis isn’t a tick-box exercise. It makes real business sense and leads to real business results by understanding what your competitors are doing well and where they’re falling short.

With this useful insight, you can improve your own strategy and efforts to connect with your audience by knowing where the gaps are. As we’ve covered in this blog, this might relate to product range, customer experience, or marketing channels – wherever the gap currently lies in your industry.

Your business can then fill that gap, placing itself ahead of rivals trying to offer customers the same thing.

At Discovery, we help lots of businesses across different sectors connect with their customers. Whether that’s acquiring new customers or building loyalty with their current customers, we can take your brand to the next level. Get in touch with our team to find out more about how we can help.